RANCHO PALOS VERDES, Calif. — As the nation’s biggest cable company and Internet service provider, Comcast is in a position to help the movie industry transition from its declining DVD business to selling movies online, said Steve Burke, chief operating officer and president of its cable business.
“So as the supplier of so many people’s video service and Internet service we think we would be in a very unique position to craft that evolution,” Burke said in an interview with Kara Swisher, co-host of the D8: All Things Digital Conference organized by the Wall Street Journal.
Burke said Comcast plans to invest in NBC after its acquisition of the media company is completed toward the end of this year. He said network television is a challenging business but the cable channels it’s acquiring are profitable.
Those cable channel businesses tend to be the best part of the media landscape now,” he said. “If you talk about Disney or Fox or Time Warner, the majority of the cash …. comes from cable.”
Asked about the Universal movie studio that’s also part of the deal, Burke said Universal has 4,000 movies that Comcast can be distributed electronically. He said the company doesn’t plan to sell the studio or other pieces.
“Those are all businesses that belong in a well-rounded media company,” he said.
Google and others are working on TV delivery systems that use the Internet to deliver content and bypass cable companies, Swisher noted.
Burke said people subscribe to cable largely because they want particular channels that are available on cable, such as ESPN.
What about ending bundles and offering a la carte channels? Burke said that’s not the way programming contracts between cable and content companies work.
“The ecosystem has evolved so that people pay $50 or $60 and get 200 channels,” he said, adding later that “It’s been pretty successful for both sides of the equation.”
Looking ahead, as new devices and services appear, it will still be in content providers best interest to have deals with distribution companies such as Comcast, Burke said.
As the bundling discussion continued, Burke poked back at Swisher, saying that he’d “like to buy the first section of the Wall Street Journal and not the next three sections.”
Asked about 3-D TV, Burke said it’s clearly coming but he’s not enthusiastic about wearing special glasses and some material may not be ideal for the medium, such as overhead shots of a football game.
“I think it remains to be seen what percent of your viewing will be in 3-D, what type of viewing you’ll do,” he said.
Although Comcast is trying to sell more movies online, Burke’s still a fan of movie theaters for a movie’s initial release.
“The best place for bringing a movie to the general public is a movie theater,” he said.
Burke said technology has been seen as a threat to content businesses but he believes new devices and distribution systems will make professionally produced content even more valuable 10 or 20 years from now.
“The reality is these things tend to be additive and the pie grows,” he said.
During a Q&A session at the end, Burke was asked about Comcast’s stance toward an open Internet, developing apps for the Comcast platform and customer service.
Burke said he and Comcast CEO Brian Roberts had been to visit Steve Jobs five times in the past decade, asking for help creating a better interface. Jobs response, Burke said, was “Of courses I can but you have to use our hardware.”
With $10 billion invested by Comcast in various set-top boxes, that’s just too complicated.
“It’s harder than we wish it was. I actually think it would be a wonderful thing if we had the open application environment that you see on an iPad for television,” he said.
“The fact of the matter is the software platform is balkanized, and it’s a hard thing to do.”
Burke said Comcast believes in an open Internet but the company has to make sure its network is running well and providing protectdions against spam and copyright violations.
“You walk this fine line between making sure the highway is not jammed with cars but also people rightly concerned access to that highway is as open as possible,” he said.
In response to a question from a person saying that “many of your customers hate you,” Burke said Comcast has about 24 million customers and 100,000 employees and “you don’t get it right all the time.”
But the company is investing hundreds of millions of dollars to improve service. “We are clearly getting better,” he said.
Cable networks were created for analog products and are now used for digital phone, TV and Internet service, he noted.
“We are an industry that cobbled itself together and are now catching up to how complicated these networks are,” he said.